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1This article first appeared in the November 2009 issue of PLC Magazine. ©Legal & Commercial Publishing Limited 2009. Subscriptions +44 (0)20 7202 1200

Over the last year or so there have been anumber of critical European Court ofJustice (ECJ) decisions affecting trademarks. In the wake of those decisions,this article gives an overview of:

• The scope of trade mark rights andinfringement actions, focusing on theenhanced protection now available tostrong brands.

• The ability of brand owners to en-force their marks in the context ofcomparative advertising and onlineuse.

• Practical steps that could be taken inlight of the risks for brand owners(see box “Practical protection”).

INFRINGEMENT ACTIONSThe Trade Marks Directive (2008/95/EC) (TMD) and section 10 of the TradeMarks Act 1994 (TMA) set out the in-fringement actions that may be availableto a trade mark owner.

In all cases, the infringer must be usingits sign or mark in the course of trade.There is some uncertainty as to whetherthere is a requirement to show that it is“use as a trade mark”, but on balancethat is probably necessary. The use must“affect the functions of the trade mark”,although the full scope of that require-ment is open to debate.

There are three kinds of trade mark in-fringement action:

Double identity infringementMarks are generally protected againstuse of an identical mark for identicalgoods or services, without the need toprove more (double identity infringe-ment) (Article 5(1)(a), TMD; section10(1), TMA). Marks will be regarded asidentical if the differences between themare “so insignificant that they may gounnoticed by an average consumer”(LTJ Diffusion v Sadas (“Arthur et Féli-cie”), Case C-291/00; www.practi-callaw.com/2-102-3165).

Confusion infringementWhere a competitor uses a mark that iseither identical or merely similar to theregistered mark on goods or services thatare identical or similar to those covered

Protecting valuablebrandsInfringers take note

Susie Middlemiss of

Slaughter and May

considers trade mark

protection for

high-profile brands in

light of recent case

law.

Illustration: Susie Middlemiss

by a trade mark registration, the trademark owner must do more to protect themark: it must prove that there is a risk ofconfusion between the two marks (con-fusion infringement) (Article 5(1)(b),TMD; section 10(2), TMA).

The likelihood of confusion is to be as-sessed through the eyes of an averageconsumer for the relevant goods, takinginto account all the circumstances.

Reputation-based infringement Marks with an established reputation at-tract a further level of protection. Wherea third party uses an identical or similarmark without justification (“due cause”),the trade mark owner may be able to takeaction where there is a risk of detrimentto the mark or unfair advantage taken ofit, even if there is no confusion (reputa-tion-based infringement) (Article 5(2),TMD; section 10(3), TMA).

This action is available whether or not thegoods or services are similar to those forwhich the mark is registered, althoughany similarity will affect the likelihood ofthe other elements being established.

Recent cases have particularly focusedon reputation-based infringement (seebelow).

REPUTATION-BASED INFRINGEMENTReputation-based infringement is a po-tentially powerful weapon for brandowners since it can expand the scope ofprotection for a mark far beyond the re-mit of the registration. For example, awell-known brand owner that producespens and only has trade mark registra-tions for its mark for pens, may be able tostop an infringer producing handbagsthat display the brand owner’s mark or asimilar mark.

Although this form of action was intro-duced a number of years ago, there havebeen few cases until recently, and itsscope had been very unclear.

ECJ guidanceThe following are the elements neededto establish reputation-based infringe-ment in the light of recent ECJ decisions:

Identical or similar marks. The infringermust use a sign which is identical or simi-lar to the registered mark. In contrastwith confusion infringement, there is noneed for similarity between the goods orservices (Adidas-Salomon AG v Fitness-world, Case C-408/01; www.practicallaw.com/6-102-5474).

A link. Although confusion is not re-quired to show this type of infringe-ment, the ECJ has recently held that thesign used must at least “call to mind”the registered mark, despite the differ-ence in the goods or services on which itis used (Intel Corporation Inc. v CPMUK Limited, Case C-252/07; www.prac-ticallaw.com/2-384-7957). The link is asomewhat odd factor as it was not en-shrined in legislation but is a creation ofthe ECJ.

Whether there is a link will be judged onthe basis of a global assessment: that is,balancing the net effect of all the circum-stances in which the marks are used and,in particular, the similarity between themark and sign, how distinctive the markis and the nature of the goods in ques-tion.

This is a low hurdle: the English courtshad favoured a stricter test for “link”, re-quiring that there be some substantialsort of association with the mark sug-gested by the sign (Intel CorporationInc. v CPM UK Limited [2007] EWCACiv 431; www.practicallaw.com/0-369-8072; L’Oréal SA and others v Bellure

NV and others [2007] EWCA Civ 936;www.practicallaw.com/7-378-7729).

The link might also be said to be a meas-ure of causation. The legislation re-quires that there be unfair advantage ordetriment (Article 5(2), TMD; section10(3), TMA). Logically, this must resultfrom the use of the sign. At a minimum,the sign must call to mind the mark for itto be said that it is the use of the sign,rather than some other competitive ac-tivity, that has resulted in the detrimentor unfair advantage. The emphasis hastherefore shifted to the need to prove ad-vantage or detriment.

Reputation. The mark must be knownto a significant proportion of the publicconcerned with the products or services(either the public at large or a more nar-row group, depending on the particulargoods or services) covered by the regis-tered mark which is alleged to be in-fringed (in a significant part of the EUfor Community trade marks (CTM) orin the UK for UK marks) (General Mo-tors Corp v Yplon SA, Case C-375/97;www.practicallaw.com/9-101-0796).

So far as a CTM is concerned, a reputa-tion in a substantial part of the Commu-nity is required, and the ECJ has recentlyindicated that a reputation in one EUmember state may be sufficient (depend-ing on the facts) (PAGO International vTiromilch, Case C-301/07; see “Trademarks: reputation in the Community”,Bulletin, Intellectual property and infor-mation technology, this issue). It re-mains unclear, however, to what extentthe protection for that CTM is limited tothat member state. This question wasleft unanswered by the ECJ in PAGO.

In addition, the ECJ has given no clearguidance on how to prove a reputationand is likely to regard this as a matterwithin the competence of the nationalcourts. As a result, there could be someinteresting decisions in this area, partic-ularly where there is variation betweenthe language and customs of memberstates. A number of national courts areused to measuring a trade mark’s reputa-tion on the basis of consumer surveys.However, English courts have histori-

2 This article first appeared in the November 2009 issue of PLC Magazine. ©Legal & Commercial Publishing Limited 2009. Subscriptions +44 (0)20 7202 1200

cally been very sceptical of surveys andthe huge variation in answers that resultsfrom slightly differently phrased ques-tions; the ECJ has also not been particu-larly encouraging.

Detriment. The ECJ in Intel recently ad-dressed the meaning of detriment andthe level of evidence required to estab-lish it. It indicated that what is requiredis a change in the economic behaviour ofconsumers, but did not elaborate onwhat that might involve.

We suggest that one way of interpretingthis is as a change in the consumer’s“willingness to buy”. If there are otherproducts with similar marks about, themark loses its exclusive caché and theconsumer is less likely to buy the originalversion. Alternatively, the availability ofrather ordinary or unsavoury productsunder a similar name may deter con-sumers from buying the original productand reduce the attractive force of themark.

This requirement gives rise to a newdilemma: how does a brand owner provea change in economic behaviour? It isopen, of course, to the courts to formtheir own view of a change in con-sumers’ perception, and a reduced desireto buy, but there will clearly be a strongtemptation to canvas the views of con-sumers and marketing experts.

However, the view of the English courtsis that evidence of branding experts is oflittle value and that the use of surveysshould be tightly controlled (Whirlpooland others v Kenwood Limited [2008]EWHC 1930 (Ch); esure Insurance Ltd vDirect Line Insurance Plc [2008] EWCACiv 842, www.practicallaw.com/9-383-1298). Instead, the courts tend to prefer

to rely on the evidence of con-sumers who give oral evidence

and are subjected to cross-examination to investi-gate their motivations for

buying a product.

Fortunately, the threatof having to show that

there has alreadybeen actual damage

to prove reputation-based infringementas a result of detriment was removed bythe ECJ in Intel: a serious risk of dam-age is enough. A brand owner will nothave to wait for the damage to be donebefore taking action. However, therestill remains a practical challenge in es-tablishing the necessary detriment orunfair advantage, whether throughshowing a change in the economic be-haviour of consumers or otherwise.This element raises the spectre of mar-ket or customer behaviour surveys, withall their forensic difficulties.

Unfair advantage. After Intel, it seemedlikely that the ECJ would take a similarapproach to the unfair advantage limb ofreputation-based infringement as it didto detriment, by applying a change ineconomic behaviour test (see above).Again, this can be analysed in terms ofimpact on the consumer’s willingness tobuy.

Unfair advantage is not necessarily ac-companied by harm, so there may not bea reduced willingness on the part of theconsumers to buy the established brand.


Practical protection

Brand owners seeking to enforce and protect their marks should:

• Consider the possibility of reputation-based infringement for both major and sec-ondary brands.

• Keep records of analysis of brand recognition and consider their potential worth(and potential to cause damage) in infringement proceedings when designing themin terms of showing:

- detriment (reduced willingness to buy);

- unfair advantage (increased willingness to buy); and/or

- impact on the ability of a mark to convey various messages.

• Take special care when creating surveys in the context of infringement proceedingsand, in particular, bear in mind that all surveys (not just those that are relied on) willbe disclosable.

• Keep contact details for potential consumer witnesses (including customer com-plaints) who can speak about confusion or a change in shopping habits (for exam-ple, change in economic behaviour or willingness to buy).

• Be on the look out for evidence of the intentions of an infringer.

• In comparative advertising, take care that any data relied on can be supported andmeets the conditions under the Comparative Advertising Directive (2006/114/EC)(see box “Comparative advertising conditions”).

• Be aware of the ability to play around with others’ marks (and the limits on this) incomparative advertising.

• Watch for references to imitations or replicas: it may be that action is availablewhere it was not previously.

• Look out for further European Court of Justice guidance on use of marks on the in-ternet, which may have a significant impact on the use of metatags and search opti-misation techniques and brand owners’ ability to control use of their marks on theinternet.


Nonetheless, in an analogous way, use ofthe sign by the infringer can result in anincreased willingness to buy the in-fringer’s goods because the sign is remi-niscent of the established mark.

However, the ECJ adopted a different ap-proach for unfair advantage in L’OréalSA and others v Bellure NV and others(Case C-487/07; see Briefing “Smell-alikes: a rose by any other name”, www.practicallaw.com/4-386/7893). The ECJindicated that unfair advantage amountsto “riding on the coat-tails” of the estab-lished mark; that is, “the infringing markis exploiting the marketing effort of theowner of the established mark to createand maintain its image, without payingany compensation”. Nevertheless, if anincreased willingness to buy the in-fringer’s goods can be shown, this wouldseem to be good evidence of “riding onthe coat-tails”.

As with other aspects of the infringe-ment test, there must be a global assess-ment of whether there has been unfairadvantage taken of the mark in all the cir-cumstances. This means balancing theusual factors: the strength of the mark’sreputation, the extent to which it is dis-tinctive, the degree of similarity betweenthe marks, the type of goods sold underthe marks and the degree of similarity (orotherwise) between the goods.

In addition, the ECJ has identified twofurther and rather surprising factorsthat can affect whether or not unfair ad-vantage has been taken of a mark:

• The likelihood of detriment; that is,dilution (where the mark is made lessdistinctive by use by others) or tar-nishment (where other use, particu-larly on cheaper goods or goods of avery different character to those forwhich a mark is known, results in anunfavourable comparison with theknown mark).

• An intention to take advantage of (orfree ride on) the mark.

The first is surprising because the twolimbs of reputation-based infringementseemed quite distinct and it is not clear

why detriment should be any indicationof unfair advantage. However, since theECJ has also confirmed that it is not nec-essary to prove detriment, this may notmatter.

The second factor is more puzzling. It isnot necessary to show an intention totake advantage, but it helps if it can beshown. The Court of Appeal has subse-quently suggested that it is necessary toestablish either an intention to take unfairadvantage or some other factor whichmakes the advantage unfair (Whirlpool).

In practice, it seems that it may be diffi-cult to identify another distinct factorsince many potential infringements (forexample, a lookalike design) will of ne-cessity be accompanied by an intentionto take advantage. The introduction ofan entirely new and subjective investiga-tion into the intention of the infringer isnot an attractive prospect in civil trademark disputes.

Interestingly, it seems that where the al-leged infringer also has a strong brand(in contrast with a cheap imitation), itmay be considerably more difficult toestablish infringement, since there isno need for a strong brand to ride onthe coat-tails of another (see box“Whirlpool v Kenwood”).

ImpactAs a result of the ECJ’s guidance inL’Oréal v Bellure, the limb of reputa-tion-based infringement requiring un-fair advantage appears to provide moreprotection than might be expected (atleast in relation to counterfeits or looka-like products) and may be easier to es-tablish than detriment. However, theCourt of Appeal decision in Whirlpooldemonstrates how significantly the out-come is affectedby the particularfacts of the case,leaving plenty ofscope for nationalcourts to introduce theirown standards.

In the cases referred bythe English courts tothe ECJ, there has been

something of a trend towards the ECJtaking a broader, more generous ap-proach to infringement actions in com-parison with the views expressed by theEnglish courts referring the cases. It willbe interesting to see how other nationalcourts approach the issue of proving achange in economic behaviour or free-riding.

It is also unclear which marks will at-tract this extended protection; this willdepend on the facts in each case.

A reputation in only one member statemay now give rise to protection, butwhether that protection extends to alarger part of the EU is uncertain: fur-ther guidance is needed from the ECJ onthis point.

One promising angle of defence for analleged infringer is to attack the reputa-tion of the mark as being insufficient togive rise to the link, detriment or dam-age. In reputation-based infringement,the greater the distinctiveness of theknown mark, the greater the likelihoodof a link and consequential detriment orunfair advantage (Premier Brands v Ty-phoon [2000] FSR 767, www.practi-callaw.com/1-101-1380; General Mo-tors v Yplon).

It will be interesting to see whether thecourts are prepared to push the bound-aries of the action still further. For ex-ample, to what extent will it be possibleto establish these elements in relation tosubsidiary or sub-brands rather thanleading brands?

Overarching test for infringementSome years ago, the ECJ apparentlyadded a further test for trade mark in-fringement: that the infringer’s activitiesmust have an effect on the functions ofthe mark (Arsenal Football Club Plc vMatthew Reed, Case C-206/01). As withthe notion of a link, this is an odd test asit is not reflected in the legislation (see“ECJ guidance” above). Over recentyears, its importance seemed to be de-

creasing. However, the ECJ recentlyrevived the concept in L’Oréal v

Bellure.


It had often been assumed that there hadto be an effect on the “essential func-tion” of the mark (that is, its function asa guarantee of origin), in order to satisfythis test. This led to concerns that in theabsence of confusion there was no effecton essential function and reputation-based infringement might be very diffi-cult to prove. In L’Oréal v Bellure, how-ever, the ECJ held that the effect is notlimited to an effect on the guarantee oforigin, so that where there is an effect onother functions (such as quality, commu-nication, investment and advertising),that may suffice.

This is helpful in the sense that it seemslogical that reputation-based infringe-ment might be more likely to affect otherfunctions rather than the origin func-tion. For example, cheap lookalike prod-ucts sold under a similar mark to a brandleader may damage the ability of theleading brand to communicate a luxuryimage or promote particular qualities of

the product, even if no-one is confusedas to who has made them.

Less helpfully, the ECJ gave no guidanceon what these functions actually are. Italso failed to clarify how this test fits inwith the other elements of reputation-based infringement. For example, if theother elements are satisfied, is it neces-sary to show, in addition, that there is aneffect on one of the functions of themark?

We suggest that this additional test addsnothing other than complication to thetests for infringement. Until it is clear,however, whether the ECJ and nationalcourts will require proof of such an ef-fect, brand owners should think aboutproducing evidence of such an effectwhen alleging infringement.

On the positive side, for reputation-based infringement, this is likely to bethe same sort of evidence needed to

show detriment in the form of economicbehaviour (a reduced willingness to buy)or riding on the coat-tails (increasedwillingness to buy).

FURTHER PROTECTIONIt is worth remembering that, in addi-tion to the three major categories of in-fringement and outside the TMD, fur-ther protection is available to particu-larly well-known marks (Article 6bis,Paris Convention and Article 16, TRIPS(Trade-related aspects of IntellectualProperty Rights Agreement)).

This protection extends beyond thescope of a trade mark registration andoutside the country of registration, butonly applies to marks with a signifi-cantly greater reputation than that re-quired for reputation-based infringe-ment (section 56, TMA).

To benefit from this protection, themark must be:

• Well-known to the interested public(in other words, famous).

• Known to belong to a person that hasthe requisite connection with the ju-risdiction (section 56(1), TMA).

The owner of a well-known mark canseek an injunction (but not damages) tostop use of another mark where it can beshown that use of that third party markis identical or confusingly similar and isbeing used in relation to identical or sim-ilar goods or services in the UK (section56(2), TMA).

Although the mark must be famous, incontrast to a passing off action (whichalso gives protection to unregisteredmarks or beyond the scope of a registra-tion), it is not necessary for the holder ofa well-known mark to have any goodwillin the UK or for the owner of the well-known mark to have suffered loss.

COMPARATIVE ADVERTISINGA trade mark owner’s infringementrights are cut back somewhat in the con-text of comparative advertising. Thescope of this reduction in rights, and theway in which a competitor’s marks can

Whirlpool v Kenwood

Two big brand owners, Whirlpool and Kenwood, went into battle over a trade mark

comprising the shape of a mixer ((1) Whirlpool Corporation (2) Whirlpool Properties

Inc. (3) KitchenAid Europa Inc. v Kenwood Limited [2009] EWCA Civ 753).

Whirlpool’s KitchenAid “Artisan” mixer had an unusual shape, which was registered

as a trade mark, and an established reputation. Kenwood sought to enter into the

same market, appealing to design-conscious consumers, with a mixer that was held to

be similar.

The Court of Appeal:

• Rejected the suggestion that any advantage flowing from the use of the mark would

be unfair, concluding that there must be an “added factor of some kind”, such as

intention, for the advantage to be classified as unfair. No other relevant factor had

been suggested.

• Found that no advantage had been taken of the mark and certainly no unfair advan-

tage, even though the Kenwood mixer had been designed with reference to the

KitchenAid Artisan, which had a monopoly in its market.

• Distinguished the case from L’Oréal v Bellure, noting that Kenwood had its own es-

tablished goodwill and did not need to ride on Kitchen Aid’s coat-tails to save itself

from making promotional efforts in relation to its own product (L’Oréal SA and oth-

ers v Bellure NV and others, Case C-487/0; see Briefing “Smell-alikes: a rose by

any other name”, www.practicallaw.com/4-386-7893). On the contrary, it aimed

to use and develop its own goodwill and reputation to promote its new product.

be used in comparative advertising, hasrecently been clarified by the courts.

Trade marks clearly have a fundamentalrole in much comparative advertising. Acomparative advertisement is one whichexpressly or impliedly identifies a com-petitor. Until relatively recently, com-parative advertising was regarded as badpractice. However, various directives(most recently, the Comparative Adver-tising Directive (2006/114/EC) (CAD))have introduced the concept into Eng-lish law (The Control of Misleading Ad-vertisements (Amendment) Regulations2000 (SI 2000/914)). The ECJ and theEnglish courts have seized on the princi-ple with some enthusiasm.

This area is complex because trademarks are governed by two parallelregimes:

• CAD, which specifically prescribeswhat sort of advertising is acceptable(see box “Comparative advertisingconditions”).

• The TMD, which provides that cer-tain uses amount to infringement andimposes limits on the way that markscan be used.

The distinction is particularly signifi-cant in the UK (although less so in othermember states), because the compara-tive advertising regime is enforced bypublic agencies: there is no private rightof action. It is therefore important forbrand owners to be clear in what circum-stances they are still entitled to sue forinfringement where their marks are usedin comparative advertising.

Helpfully, the ECJ has indicated that thephrases used in CAD that also appear inthe TMD (confusion and unfair advan-tage) mean the same thing in both con-texts.

CAD defenceIf a competitor uses the mark of anothertrader in a comparative advertisement ina way that would normally amount toinfringement through use of an identicalmark for identical goods (that is, doubleidentity infringement), the comparative

advertising regime provides a new de-fence: provided that the advertisement isotherwise acceptable (that is, it complieswith the CAD conditions (see box“Comparative advertising condi-tions”)), there will be no infringement.

There is, however, no defence to confu-sion infringement or reputation-basedinfringement because key elements ofthose causes of action are also offensiveunder CAD. Use of a trade mark in anadvertisement that does not complywith the CAD conditions may thereforealso amount to infringement.

Case law has made clear that not only isit possible to use a competitor’s wordmark (provided the CAD conditions aremet), but that a comparative advertisermay also use a logo. It is not necessary toshow that the comparative advertiser“needs” to use a mark for a comparison:

the English courts have recognised thatan advertisement may be more effectiveif a mark is used and that this should in-clude logos or device marks ((1) O2

Holdings Ltd (2) O2 (UK) Ltd v Hutchi-son 3G Ltd [2006] EWHC 534 (Ch);[2006] EWCA CIV 1656). In addition,the competitor is entitled to change thelogo, provided that the other conditionsare met.

As a result, Hutchison 3G was allowed toproduce an advertisement using bubblessimilar (but not identical) to the bubblesthat O2 uses and had registered as a trademark. In the advertisement, the bubblesmoved slowly and were drained of colourto convey an impression of a slow, old or-ganisation in contrast with 3G’s colour-ful dynamic logo whizzing around. Theadvertisement did not cause confusion ordetriment, nor did it take unfair advan-tage of the mark (see also News briefs“Trade marks and comparative advertis-ing: burst bubbles”, www.practicallaw.com/6-202-2945 and “Comparative ad-vertising: trade marks hold their own”,www.practicallaw.com/2-382-2645).

Imitations and replicasCAD prohibits advertisements whichpresent goods as imitations or replicas(Article 4(g)). This is highly relevant totrade marks, since many imitations orreplicas will bear infringing trademarks. In particular, advertisements willbe caught if they either:

• Explicitly evoke the idea of imitationor reproduction.

• Implicitly communicate such an ideato the public.

Whether either of these is the case is tobe judged by looking at the overall pres-entation of the advertisement and itseconomic context.

The ECJ has confirmed that this condi-tion is not limited to counterfeits, butalso applies to any imitation or replica(or anything presented as a replica,whether or not it is actually a replica)and there is no need for the advertise-ment to be misleading or confusing(L’Oréal v Bellure).


Comparative advertising conditions

A comparative advertisement is ac-

ceptable under the Comparative Ad-

vertising Directive (2006/114/EC) if,

in general terms, it:

• Is not misleading.

• Compares substitutable goods.

• Compares material, relevant and

verifiable features.

• Does not result in confusion.

• Does not discredit or denigrate the

trade marks, trade names, other

distinguishing marks, goods, serv-

ices, activities or circumstances of

a competitor.

• Does not take unfair advantage of

the reputation of a trade mark, trade

name or other distinguishing mark

of a competitor or of the designation

of origin of competing products.

• Does not present goods or services

as imitations or replicas.

It has also indicated that the concept ofan imitation or a replica is a broad one: itmay be an imitation of the whole prod-uct, or merely an imitation of an essen-tial characteristic of that product. InL’Oréal v Bellure, the ECJ indicated thatthe smell of a perfume could be an essen-tial characteristic of that product.

It seems clear that describing a productas X style or X type (where X is a trademark) will fall foul of CAD. It may bethat something which bears differentmarks but is equivalent in certain fea-tures and compared to a brand leader

will be seen to be “presented as areplica”, for example, a generic pharma-ceutical.

Presumably, spares for another productwhich are described as X-compatiblewill not be regarded as replicas (other-wise CAD conflicts with Article 6(1)(c)of the TMD, which allows use of a markto indicate the purpose of a product; inparticular, as an accessory or spare part).

What is unfair? Significantly, the ECJhas also expanded on the concept of“unfair” in the context of comparative

advertising. In addition to indicatingthat the meaning of unfair advantageshould be the same for CAD and theTMD, the ECJ has said that where aproduct is presented as an imitation orreplica in comparative advertising, thatis inconsistent with fair competition andis unlawful (L’Oréal v Bellure). So, it fol-lows, any advantage gained is unfair.

On the same basis, it would seem thatevoking or communicating the idea of areplica or imitation by reference to acompetitor’s brand will be unfair for thepurposes of the unfair advantage limb


Keyword advertising is a practice offered by internet search en-

gines, the most well-known of which is Google’s “AdWords” serv-

ice (one of Google’s main sources of revenue). Keywords or ad-

words are words chosen and paid for by advertisers in order to

trigger the display of a sponsored link when the relevant term is

used in a search engine query. For example, if “home insurance”

is entered into Google, links to certain sponsored links will ap-

pear separately from the “pure” search results.

The advertiser pays Google for each “click-through” to its website

from the sponsored link and can specify how much it is willing to

spend per click. The sponsored links typically consist of a hyper-

link to the advertiser’s website and a short description (which is

provided by the advertiser) of the goods or services offered through

that site. In some cases, the description includes the trade mark of

a third party (which is, of course, not “invisible” use).

Metatags are tags which appear in the source code of a webpage

but not in the visual appearance of that page. Their principal

purpose is to increase the appearance of the webpage in search

results.

Seeking judicial guidanceTo date, there has been little guidance from the courts on

whether use of a trade mark as a keyword or metatag constitutes

infringement. Jacob LJ in Reed Executive v Reed Business Infor-

mation Ltd described (obiter) the use of metatags and keywords

as “invisible use”, stating that “uses made only by computers

may not count – they never convey their message to anyone”

([2004] RPC 40; www.practicallaw.com/6-102-7543).

There has been a series of cases in the EU in which keyword ad-

vertising has been challenged by trade mark owners. Even

though trade mark law is harmonised under the Trade Marks Di-

rective (2008/95/EC), the various national courts have reached

different results. For that reason, a series of references (includ-

ing two from the High Court) have been made to the European

Court of Justice (ECJ) for a preliminary ruling (Google France &

Google Inc. v Louis Vuitton Malletier, Google France v Viaticum

and Google France v CMRRH & ors, Cases C-236 to 238/08).

The ECJ has been asked to determine, among other things,

whether:

• Google AdWords involves “use” of the trade mark by Google

within the meaning of the TMD and involves such “use” by a

competitor.

• It makes a difference if the trade mark appears in the text of

the sponsored link.

• It is relevant that a sponsored link is displayed separately

from the “pure” search results.

There will be no reliable guidance from the ECJ on these issues

until early 2010. In the meantime, the Advocate General has is-

sued an opinion that is fairly controversial, if arguably prag-

matic, (although it will not necessarily be followed by the ECJ)

because it adopts a narrow approach to infringement in relation

to keywords, suggesting that neither the selection nor display of

keywords comprising trade marks of other parties amounts to in-

fringement (for a full summary, see Exclusively online article

“Trouble ahead for brand owners? European Court of Justice

holds key to fate of Google AdWords”, www.practicallaw.com/5-

500-2930).

Further questions relating to whether the use of sponsored links

(in response to a keyword comprising a registered mark)

amounts to infringement will also be referred to the ECJ follow-

ing two High Court decisions (L’Oréal and others v eBay Interna-

tional AG and others [2009] EWHC 1094 (Ch); see News brief

“Protecting trade marks: because they’re worth it”, www.practi-

callaw.com/4-386-3102; and Interflora v M&S [2009] EWHC

1095 (Ch)).

Keywords and metatags

required to prove reputation-based in-fringement (see “Reputation-based in-fringement” above). If that is so, theremay now be greater opportunities totake action against imitations.

CYBERSPACEControl of the use of trade marks in elec-tronic communication is critical tobrand owners. The internet has created amuch greater exposure to potentialtrade mark infringements for trade markowners. These can range from “tradi-tional” type infringements, such as theunauthorised use of a trade mark on athird party’s website, to internet-specificissues, such as the use of trade marks askeywords and in metatags (see box“Keywords and metatags”).

Given the global reach, fast pace and rel-ative anonymity of the internet, brandowners are also faced with much greaterpractical difficulties in policing infringe-ments and taking action against in-fringers.

The basic starting point is that trademark rights are still enforceable online.However, jurisdiction must first be de-termined. For example, does a US web-site promoting goods and services in theUS infringe a UK registered trade mark?Can it be argued that the use of a trademark online constitutes worldwide usebecause the website can be accessed any-where in the world?

The English courts will take jurisdictionwhere a website is directed at customersin its jurisdiction (Euromarket DesignsInc v Peters and Crate & Barrel [2001]FSR 20). The mere fact that a website isglobally accessible is not sufficient (1-800 Flowers Inc v Phonenames Ltd[2002] FSR 191; www.practicallaw.com/4-101-5107).

The intention of the website owner andwhat the user would understand theowner’s intentions to be when accessingthe site (that is, an objective inquiry) areimportant factors in determining juris-diction. So, a website which has a“.co.uk” address, quotes prices inpounds sterling and has English contactdetails, would certainly be considered tobe directed at the UK market.

However, it is unclear where the line is tobe drawn. For example, would advertis-ing and promotion which are directed tothe UK be sufficient if the UK consumercould not buy the goods online for theUK? We suggest that they might be if theconsumer could buy the goods whenabroad or even by phone.

If jurisdiction is established, then,broadly speaking, the same three in-

fringement tests will apply (see “In-fringement actions” above). However,issues relating to the “use of a trademark” (in particular, whether this con-stitutes “use” for the purposes of the in-fringement provisions) arise, notably inconnection with keywords and metatagsor so-called “invisible use”, and havebeen the subject of recent judicialscrutiny (see box “Keywords andmetatags”). Further guidance on thistopic is due from the ECJ in 2010.

Susie Middlemiss is a partner at Slaugh-ter and May. The author would like tothank Laura Balfour and Steven Warnerfor their help with the preparation ofthis article.


Related information

Links from www.practicallaw.com and the webThis article is at www.practicallaw.com/9-500-4673

Topics

Trade marks www.practicallaw.com/2-103-2080

Advertising and marketing www.practicallaw.com/0-103-1114

Practice notesOverview of trade marks www.practicallaw.com/4-107-3668

Comparative advertising www.practicallaw.com/6-383-9837

Previous articlesIntellectual property in the fashion industry:

protecting rights (2008) www.practicallaw.com/0-381-9644

Comparative advertising:

all’s fair in love and price wars? (2007) www.practicallaw.com/6-378-8786

Archive content:

uncovering the layers of rights (2003) www.practicallaw.com/9-102-4067

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